FCA Joins Forces in Major London Crackdown on Illegal Peer-to-Peer Crypto Trading

The Financial Conduct Authority hit three London premises this week, issuing cease and desist letters to operators suspected of running illegal peer-to-peer crypto trading. It didn’t go in alone.

HMRC and the Metropolitan Police Service both joined the operation, making it a multi-agency push against what the FCA calls a growing and largely invisible problem. Peer-to-peer crypto trading — where buyers and sellers deal directly with each other, cutting out any formal exchange — isn’t inherently new. But doing it in the UK without FCA registration is illegal, full stop. And right now, there are zero FCA-registered peer-to-peer crypto businesses operating legally in the country. Not one. That absence matters because it means every peer-to-peer crypto operation currently running in the UK is, by definition, unregistered. The FCA says that gap creates a direct route for money laundering, letting illegal funds move fast with almost no oversight.

Zero registered firms. That’s the number.

What the FCA Actually Said

Steve Smart, the FCA’s executive director of enforcement, was pretty direct about the agency’s position. Per Smart, the FCA is actively tracking and disrupting illegal crypto activity, and any unregistered business should expect scrutiny. He didn’t soften it. The message was basically: if you’re operating without registration, you’re already on the radar.

Detective Sergeant Sathish Alalasundaram of the Metropolitan Police added some texture to why these cases are hard. Crypto investigations are complex, he said, partly because funds move across jurisdictions fast — sometimes faster than investigators can follow. That cross-border speed is probably the single biggest enforcement headache. A transaction that starts in London can touch five countries in minutes, and tracing it requires coordination that takes time most investigators don’t have.

The operations were carried out under the Money Laundering, Terrorist Financing, and Transfer of Funds Regulations 2017. That’s the legal framework the FCA leans on when it goes after crypto firms that skip the registration process. Crypto assets in the UK are largely unregulated beyond specific anti-money laundering measures, and those measures stay in effect until October 2027. So the window for enforcement under the current regime is real, but it’s not permanent.

Building on April’s Groundwork

September’s action didn’t come out of nowhere. Back in April, the FCA ran a similar operation and gathered evidence that fed directly into ongoing criminal investigations. The FCA confirmed that those earlier findings are still active. It’s not a one-off sweep — it’s a sequence.

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The FCA has form here. It’s previously prosecuted operators of unlawful crypto ATM networks and helped secure arrests tied to illegal crypto exchanges. The agency seems to view peer-to-peer trading as the next front, probably because it’s harder to spot than a physical ATM and easier to scale without attracting attention. Someone running a peer-to-peer operation can do it from a phone. There’s no hardware, no storefront — or at least, there doesn’t have to be. The three London premises targeted suggest some operators are still working from fixed locations, which makes them easier to find.

And the FCA’s approach isn’t purely reactive. The agency actively encourages consumers to check whether any crypto firm they’re dealing with appears on the FCA register. The Firm Checker tool is the main resource for that. It’s a basic step, but the FCA keeps pushing it because a lot of retail users simply don’t think to verify registration before handing over funds.

Unregistered traders bypass the controls that exist specifically to catch illicit money movement. That’s not a technicality — it’s the core of why the FCA treats unregistered peer-to-peer trading as a serious financial crime risk rather than a regulatory paperwork issue. When a firm isn’t registered, it’s not running KYC checks, it’s not filing suspicious activity reports, and it’s not subject to audit. That’s a clean channel for anyone who wants to move dirty money.

The broader crypto enforcement picture in the UK has been building for a few years. Regulators globally have struggled to keep pace with how fast digital asset markets move and how easily they cross borders. The FCA’s partnership with HMRC and the Metropolitan Police is part of an effort to pool resources and close the coordination gap. Neither agency can do it well alone — HMRC brings financial intelligence, the Metropolitan Police bring investigative muscle, and the FCA brings regulatory authority. Together they can move faster.

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No details yet on whether the three targeted premises face further criminal proceedings beyond the cease and desist letters. Unclear if any arrests were made during the September operation. The FCA didn’t specify.

What’s clear is the direction. The FCA isn’t waiting for peer-to-peer crypto trading to grow into a bigger problem before acting. It’s moving now, with partners, using evidence gathered over months — and it’s said plainly that more businesses are probably already under review.

The Firm Checker tool is available directly on the FCA’s website.